An employer attempted to freeze his employee’s employment during the Covid-19 lockdown when his business’s revenue decreased. He told his employee, that until sales pick up, she would not have any work. The employer claimed that this was not redundancy, rather he was putting the employee on temporary unpaid leave.

The Employment Relations Authority (ERA) held that this was an unjustified dismissal. What really occurred was a unilateral breach to end the employee’s employment without going through the correct redundancy process as outlined in her employment agreement, nor did the employer hold a meeting with the employee to give her an opportunity to comment on the redundancy process.

The ERA also noted that the employee should not have been dismissed with urgency as she was receiving the Covid-19 wage subsidy.

The employer was ordered to pay nearly $4000 in lost wages and $18,000 in compensation for the hurt and humiliation the employee faced as a result of her dismissal.

Employers should follow the correct redundancy processes, even if their business is struggling, to avoid hefty penalties.


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